Tips to Create Your Family’s Financial Plan

Family financial planning helps you manage everyday expenses while preparing for long-term goals like college, retirement or homeownership. It includes budgeting, saving, investing and estate planning. With clear priorities and regular check-ins, families can work to build lasting financial security.

This guide offers practical tips to support your family financial planning efforts and help protect your wealth for the next generation and beyond.

Set clear financial goals as a family

If you’re not sure where to begin with family financial planning, start with a conversation about what truly matters. Sit down as a family and outline your short-term goals — like paying off debt, building an emergency fund or covering recurring expenses — alongside long-term priorities such as saving for college, buying a home or planning for retirement. Defining these goals together helps ensure everyone is working toward the same vision.

Once priorities are clear, it’s important to focus on just a few goals at a time. Using the SMART approach — setting goals that are specific, measurable, achievable, relevant and time-bound—can help you stay organized and follow through, especially when balancing limited time or income. Choose the goals that feel most urgent or meaningful to your family and commit to specific action steps for each one. With shared intention and consistent communication, even ambitious goals become more achievable.

Build a household budget that supports your goals

A solid household budget gives your family a clear picture of how money flows in and out each month. Start by listing all sources of income, followed by fixed and variable expenses. A fixed expense is something that stays the same each month, like your rent or mortgage, insurance premiums or car payments. Variable expenses, like entertainment, home repairs or dining out, change month to month. Tracking your spending regularly helps you identify patterns, spot unexpected expenses and make informed adjustments. When everyone understands the numbers, it's easier to stay aligned and make choices that reflect your shared priorities.

As you build your budget, allocate funds intentionally across three main categories: saving, spending and debt repayment. A common starting point is the 50/30/20 rule—where 50% of your income goes to needs, 30% to wants and 20% to savings or paying down debt. But the exact amounts can be adjusted based on your family’s financial situation. What matters most is having a plan that directs your money toward your goals — whether that’s building an emergency fund, saving for college or reducing high-interest debt.

Establish a family emergency fund

An emergency fund is a key pillar of family wealth management. It provides a financial safety net when life throws curveballs — like sudden medical bills, car repairs or job loss. Having cash set aside brings both security and peace of mind, allowing your family to stay on track without derailing longer-term financial priorities.

A good rule of thumb is to save enough to cover 3 to 6 months of essential living expenses, such as housing, food, utilities and transportation. But any amount you can set aside may help in an emergency, so start small and build from there. Keep these savings separate from your regular checking account, so the funds are easily accessible when you need them but not used for everyday spending.

Explore family wealth management

Family wealth management goes beyond basic budgeting. It’s a long-term approach that combines investing, tax planning, retirement savings and insurance to protect your family’s financial future. Together, these strategies can help ensure your resources work efficiently toward short-term goals and long-term goals. In each of these areas, you might consider consulting a professional, who may help guide you through major considerations and decisions.

Investment planning

Start by creating an investment strategy that fits your family’s goals, risk tolerance and time frame. Diversifying your portfolio across different asset classes — such as stocks, bonds and cash — may help reduce risk and increase stability. Regularly reviewing and rebalancing your investments can keep them aligned with your evolving priorities and strengthens your overall family wealth planning.

Goal-based investing may be especially helpful when you’re saving for specific milestones like a child’s education or a future home. By linking your investments to real-life goals, you can stay focused and make more informed decisions over time. A disciplined investment plan supports the long-term growth of family assets while giving you flexibility to adapt as your goals and needs change.

Tax efficiency

Tax-efficient strategies may help preserve more of your earnings and investment gains. Some accounts for specific purposes, such as traditional or Roth IRAs, 401(k)s and 529 plans, allow you to pay taxes later or avoid them altogether on contributions and growth.

Consider spreading your investments across taxable, tax-deferred and tax-free accounts. This kind of strategy may reduce your overall tax liability and improve net returns over time.

Retirement savings

Building a robust nest egg starts with contributing regularly to employer-sponsored retirement plans, like 401(k)s or 403(b)s. Some employers will even match your contributions up to a certain percent of your income. You may want to set up automatic contributions from your paycheck, so you can fund your retirement account without needing to do so manually.

Retirement accounts have yearly maximums you can contribute based on your age. If possible, consider maximizing contributions each year and adjust your portfolio to reflect changing horizons. As retirement approaches, for instance, you may want to gradually shift to more conservative investments to protect your savings while maintaining growth potential.

Insurance coverage to protect income and assets

Insurance plays a vital role in family wealth planning and financial management by shielding your household from the financial impact of unexpected events. Life insurance helps ensure your dependents can maintain their quality of life by replacing your lost income, covering debts or paying for final expenses. Health and disability insurance protect you if you become ill or injured, while property insurance safeguards your assets against damage or loss.

Without proper coverage, even a short-term event — like a medical emergency or a temporary disability — could jeopardize years of savings. Including insurance as part of your financial strategy ensures that sudden setbacks don’t drain resources meant for retirement, education or other goals.

Consider financial estate planning

Financial estate planning is the process of organizing how your assets will be managed and distributed after you die. It ensures your property, savings, investments and personal wishes are accounted for while minimizing legal delays and family disputes. Without a plan in place, state laws will likely decide who inherits your assets, which may not reflect your intentions.

A strong estate plan may include documents like a will, powers of attorney, beneficiary designations and, in some cases, a living or revocable trust. These documents make it clear who will make financial or medical decisions on your behalf if you’re unable to, and who will receive your assets when you pass. There are a lot of considerations when it comes to estate planning, and factors like your income, savings and family relationships may impact your decisions. An estate planning professional may be able to help you make the choices that are best for your family wealth strategy.

Foster communication

Assign clear roles to each family member for financial responsibilities, like paying bills, managing bank accounts or gathering documents for tax season. By designating who handles what, you can avoid confusion and make sure essential tasks are taken care of smoothly.

Schedule regular financial check-ins — at least quarterly — to review your budget, track progress on goals and adjust priorities as needed. Having these conversations builds trust, keeps everyone informed and helps align your actions with the broader family financial management strategy.

Review and update your plan regularly

A financial plan isn’t something you create once and forget. It evolves with your life. Make it a habit to review your family’s financial plan at least once a year, or sooner if you experience a major life change, like getting married, having a child, changing jobs, buying a home or dealing with a health emergency. These events may shift your income, expenses, goals or risk tolerance.

During each review, assess whether your current goals still make sense, whether your budget aligns with your needs and whether you need to update key documents like wills, beneficiary designations or insurance policies. You may also want to rebalance investments or adjust savings strategies. Regular check-ins help you stay in control and ensure your family financial management efforts reflect your current reality — not just where you were a year ago.

Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.